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Access Northeast is a Pipe Dream!

A recent report by Synapse Energy economics questions the need for the Access Northeast project. You can read more on Synapse's blog, but here's a few snippets:

Is gas demand going up?

First, with or without a new pipeline, existing laws and regulations will cumulatively require New England’s use of natural gas for electric generation to decrease by 27 percent by 2023, relative to 2015 levels.

Natural gas use is forecasted to decline dramatically in 2023—just a few years after the ANE pipeline is supposed to be fully operational (see Figure 1). Existing laws such as renewable portfolio standards, energy efficiency resource standards, long-term requirements for additional hydropower and wind power, and carbon dioxide (CO2) emissions caps will require a significant reduction in natural gas-fired generation throughout New England. This decrease in overall gas use will reduce capacity constraints of existing pipelines and the need for new pipelines. By 2023, shortly after ANE’s construction, natural gas-fired generation is estimated to be 27 percent lower than in 2015. And by 2030, natural gas-fired electric generation is estimated to be 41 percent lower than in 2015.

How much will Access Northeast (ANE) cost?

The ANE pipeline will cost New England consumers $6.6 billion, not $3.2 billion as previously reported.

Proponents of ANE publicized an expected pipeline construction cost of $3.2 billion. However, according to expert witness testimony for Eversource, one of the main project proponents, after taking into account additional costs, including operations and maintenance, depreciation expenses, and return on equity, the ANE pipeline is expected to cost $0.5 billion per year for 20 years—about $6.6 billion in present value terms. The pipeline developers seek to charge these costs to electric ratepayers throughout New England.

Is ANE a good deal?

Third, if the pipeline is built, New England ratepayers will pay additional costs of $277 million over its lifetime.

Even if the ANE pipeline reduces constraints and gas prices, it will cause overall price increases for consumers throughout New England due to the cost of the pipeline itself. The pipeline is expected to impose net costs of $277 million on all New England electric ratepayers on a present-value basis.

Fourth, if the pipeline is built, electric ratepayers in Massachusetts and Connecticut will pay additional costs of $141 million and $85 million, respectively.

Massachusetts ratepayers will see cost increases associated with the ANE pipeline. Our analysis shows that Massachusetts electric ratepayers will pay additional costs of $141 million over the life of the pipeline.